US Citizens face complex problems overseas due to FATCA

While FATCA was signed into law in 2010, many of the rules didn’t come into effect until 2013. Now many US Citizens living abroad are feeling the effects of FATCA. Also a ‘blowback’ effect has occurred, many foreign institutions not willing to deal with the complexities of the new rules have simply chosen to ban US Citizens from opening accounts. Some banks have even force-closed US accounts in order not to deal with aggressive US regulators and the IRS. Now it’s being observed that while the intent of FATCA was to drum up revenue for a dwindling US reserve, in actuality it’s raised little money and has damaged the image of the US abroad.

But in reality, that proposal—the “Foreign Account Tax Compliance Act” (FATCA), signed into law by President Obama in 2010—is inadvertently making life more complicated for any number of honest, law-abiding U.S. citizens living and working overseas by imposing onerous reporting on both financial institutions and taxpayers.

In August, the Wall Street Journal reported that based upon a review of Treasury Department quarterly data, record numbers of Americans are renouncing their citizenship. In the first six months of 2013, a total of 1,809 Americans had renounced their citizenship.